(Photo: Diego M. Radzinschi/ALM)
Continental Breakfast: your daily update on what’s happening in Europe.
Lawyers for Russia’s state-controlled oil giant Rosneft manipulated court rulings in order to help it seize hundreds of millions of dollars in assets belonging to the now-defunct private oil major Yukos, the Financial Times reports.
Emails seen by the newspaper show Rosneft lawyers giving instructions to an Armenian judge on the outcomes required in five Yukos-related cases. Other emails show Rosneft lawyers working to draft rulings in advance for an Armenian court in cases relating to Rosneft’s takeover of Yukos’ treasury arm, Yukos CIS.
Rosneft, which denies allegations of judicial misconduct, bought the majority of Yukos’ assets at a significant discount after the company collapsed in 2006 under the weight of a $27 billion bill issued by the Russian government for unpaid taxes.
The seizure and sale of Yukos’ assets resulted in a glut of multijurisdictional litigation by shareholders and other interested parties.
An arbitration tribunal ruled in 2014 that Russia expropriated Yukos and should pay $50 billion in compensation to a group of the company’s former shareholders.
The decision—comfortably the largest arbitral award in history—was overturned by a Dutch court earlier this year, however. GML Ltd., a holding company belonging to four former Yukos owners, is preparing for an appeal hearing in January.
Uber Begins Key Legal Battle
A long-awaited legal battle over Uber’s European business begins today.
The European Court of Justice—the EU’s top court—will determine whether Uber is a transportation company or a digital service.
The hearing relates to a dispute between Uber and a Spanish taxi association, which filed legal proceedings in 2014, claiming unfair competition. But the decision could have dramatic ramifications for the cab-hailing app’s business across the region.
If Uber is deemed to merely be a service that matches independent drivers to potential passengers, it will be able to continue to operate relatively freely across the region. But if the court decides it is a transport company, it will be subject to much tighter regulation and could even see some of its services banned by certain EU countries. It is also possible that the 15-strong panel of judges may consider Uber to meet both criteria, which would leave the company in an uncertain position.
A ruling is not expected until March 2017 at the earliest.
Uber has faced often fierce opposition from European regulators and taxi companies since launching on the continent in 2011. The California-based company’s services have at various points been banned or restricted in Belgium, France, Germany, Italy, the Netherlands and Spain.
Uber last month lost a landmark legal challenge over the employment status of its U.K. drivers.
The London employment tribunal ruling that its drivers should be classed as workers, rather than self-employed, means they are now entitled to workers’ rights, including paid vacation and rest breaks, and must also be paid the national minimum wage, which doesn’t apply to self-employed workers.
U.K. workers’ trade union GMB, which brought the two test cases in July, described the ruling as a “monumental victory” and said it would have “major implications” for the so-called gig economy, where people work independently via smartphone apps such as Uber, Lyft and TaskRabbit, without a fixed contract.
Uber argued that it is a technology company, not a transport provider, meaning that its drivers are therefore self-employed contractors, rather than employees. But the judge overseeing the tribunal said that “the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous.”
Uber, which was represented by DLA Piper, said it will appeal the ruling. The San Francisco-based company is facing similar claims in the United States and agreed to pay up to $100 million to end a class action suit over the employment status of drivers, but the settlement was rejected by a federal judge in August.
KWM Exits Continue
Partners continue to flee struggling King & Wood Mallesons, with global head of litigation Craig Pollack in talks to join Covington & Burling, according to The American Lawyer’s U.K. sister title Legal Week.
KWM’s European practice has suffered a significant number of senior exits over the past year and now faces an uncertain future after its partners comprehensively rejected a financial rescue deal from the firm’s Asia arm, despite having being told that they may have to repay two years’ worth of profits if the deal was not approved. (A leading expert in partnership law says it would be practically impossible for the firm to claw back the profits.)
KWM has said in a statement that its European management board is now “considering a range of strategic options, including mergers, in conjunction with the firm’s bankers and financial advisers.” The firm recently held recently held unsuccessful talks with Morgan, Lewis & Bockius.